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  • FIRST POST
    • lotteryman
    • By lotteryman 7th Dec 17, 12:16 PM
    • 9Posts
    • 6Thanks
    lotteryman
    sale price does not cover mortgage/charges
    • #1
    • 7th Dec 17, 12:16 PM
    sale price does not cover mortgage/charges 7th Dec 17 at 12:16 PM
    Can someone confirm that if I buy a property and the price I pay does not cover the mortgage/charges secured on the property by the previous owner, that the vendor is still responsible for that debt and that the loan company cannot repossess the property or make a claim from me for the outstanding amount?

    Thanks
Page 1
    • Mutton Geoff
    • By Mutton Geoff 7th Dec 17, 12:21 PM
    • 999 Posts
    • 1,042 Thanks
    Mutton Geoff
    • #2
    • 7th Dec 17, 12:21 PM
    • #2
    • 7th Dec 17, 12:21 PM
    Correct, your conveyancers will ensure you are purchasing with clean title.
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    All with a big thank you to Martin and MSE.com from Mutton Geoff!
    • martinsurrey
    • By martinsurrey 7th Dec 17, 12:47 PM
    • 3,225 Posts
    • 3,927 Thanks
    martinsurrey
    • #3
    • 7th Dec 17, 12:47 PM
    • #3
    • 7th Dec 17, 12:47 PM
    Can someone confirm that if I buy a property and the price I pay does not cover the mortgage/charges secured on the property by the previous owner, that the vendor is still responsible for that debt and that the loan company cannot repossess the property or make a claim from me for the outstanding amount?

    Thanks
    Originally posted by lotteryman
    The big one is "IF" you buy it.

    The mortgage company can refuse to release the charge on the property if they wont get all of the loan repaid, which would stop you from buying.

    If they agree to release though, you can buy it, and they cant come knocking to reposes.

    What they agree with the current owner regarding the shortfall is neither here nor there as far as you are concerned, as long as they agree something!
    • G_M
    • By G_M 7th Dec 17, 12:56 PM
    • 42,330 Posts
    • 49,172 Thanks
    G_M
    • #4
    • 7th Dec 17, 12:56 PM
    • #4
    • 7th Dec 17, 12:56 PM
    Are you doing the conveyancing yourself? Don't!

    Your solicitor will insist on receiving, from the seller's solicitor, a 'solicitors undertaking' that the Charge will be removed.

    The seller's solicitor will only give such an undertaking (at risk of losing his solicitors licence) if he is confident he'll be able to remove the Charge.

    So he will insist on receiveing enough additional cash from his client, the seller, to make up the shortfall, or alternatively insist that the mortgage lender will move the outstanding loan to an 'unsecured' loan (ie the Charge on the property will be removed.

    It's not really your problem how te seller achieves the removal of the Charge, so long as it happens. Thus the 'solicitors undertaking' between solicitors.

    However, if you DIY your conveyancing, a solicitors undertaking is pretty meaningless, hence don't do it.
    Last edited by G_M; 07-12-2017 at 12:59 PM.
    • ThePants999
    • By ThePants999 7th Dec 17, 1:28 PM
    • 904 Posts
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    ThePants999
    • #5
    • 7th Dec 17, 1:28 PM
    • #5
    • 7th Dec 17, 1:28 PM
    While I don't disagree with your opening line, G_M - why would an undertaking from the seller's solicitor become meaningless if made to a non-solicitor? I'm pretty sure that's incorrect, and a layman has just as much right to rely on the vendor's solicitor's undertaking (and the same rights of recourse if breached) as a solicitor would.
    • martinsurrey
    • By martinsurrey 7th Dec 17, 1:45 PM
    • 3,225 Posts
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    martinsurrey
    • #6
    • 7th Dec 17, 1:45 PM
    • #6
    • 7th Dec 17, 1:45 PM
    While I don't disagree with your opening line, G_M - why would an undertaking from the seller's solicitor become meaningless if made to a non-solicitor? I'm pretty sure that's incorrect, and a layman has just as much right to rely on the vendor's solicitor's undertaking (and the same rights of recourse if breached) as a solicitor would.
    Originally posted by ThePants999
    Solicitors undertakings are enforceable by the high court as well, and don't necessarily need to be given to another solicitor.
    • G_M
    • By G_M 7th Dec 17, 1:45 PM
    • 42,330 Posts
    • 49,172 Thanks
    G_M
    • #7
    • 7th Dec 17, 1:45 PM
    • #7
    • 7th Dec 17, 1:45 PM
    While I don't disagree with your opening line, G_M - why would an undertaking from the seller's solicitor become meaningless if made to a non-solicitor? I'm pretty sure that's incorrect, and a layman has just as much right to rely on the vendor's solicitor's undertaking (and the same rights of recourse if breached) as a solicitor would.
    Originally posted by ThePants999
    I think you're right. I stand corrected.

    However the existance of this debt which exceeds the sale price adds a risk and complexity for a DIYer.

    I've always said (and still do!) that DIY conveyancing depends on the the ability of the DIYer and the complexity of the deal (free/leasehold; registered/unregistered etc).

    This ramps up the complexity one notch (plus given the qeuery, brings into question the OP's ability to DIY).

    But yes, the solicitors undertaking would still apply (indeed does in any purchase of a mortgaged property.)
    • lotteryman
    • By lotteryman 7th Dec 17, 4:00 PM
    • 9 Posts
    • 6 Thanks
    lotteryman
    • #8
    • 7th Dec 17, 4:00 PM
    • #8
    • 7th Dec 17, 4:00 PM
    Thanks for all the responses, very useful.
    I am not doing the conveyancing myself but am looking through the legal pack for an auction property.
    A further question :
    I would have thought that if there was a charge/mortgage on the property it would appear on the title deed but there is nothing to suggest this. This is the case with other title deeds I've looked at. Is this the case? if not I wonder therefore, if the wrong box was ticked on one of the other forms.
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